Debt Sabotages Your Freedom and Opportunities
Hey guys! Today I want to talk about debt. More specifically, not having it. We all know that debt is a pretty common part of the Western lifestyle- most people have it, and the ones who don’t are weird. (Haha)
The average American has several credit cards, at least one auto loan, a typically hefty student loan, and a home loan. Woah. Doesn’t that seem a little nuts?
All of these loans add up to a huge pile of OBLIGATION. Obligation to stay at the job you are currently in, obligation to stay in the same city you live in, obligation to put off those dreams you’ve had in the back of your mind for years…
Frankly, I believe that debt steals your freedom and robs you of opportunities you would otherwise jump on. Here are some common ways that debt holds us back:
- It’s a lot harder to quit the job you hate and start your dream career when you have huge loan payments to meet every month. You lack a safety cushion.
- Debt prevents you from saving. When you make debt payments, you are essentially paying for a past life that you are no longer living. Savings = FREEDOM.
- How much adventuring could you do with an extra $500, $1,000, or even $1,500 per month? I’m guessing that the answer is A LOT! When you send those dollars to a loan company, you can’t use them to fund the dream lifestyle you really want.
For many families, the debt to income ratio heavily influences how many children the couple can have, if they can afford another pet, and how many fun invites from friends they can accept. That’s kind of a sad thought, right? Lastly, debt often adds a ton of stress to your life and leaves you awake at night worrying about the what-ifs.
What would you do with your life if you didn’t have debt? Maybe spend a month on the beach in Thailand? Or start that business you’ve always wanted? Maybe you’d move to another city that you’ve always thought felt right to you. Or maybe you’d just move to Europe and drink champagne on a yacht with hot French bachelors all day.
All joking aside, getting out of debt and building up a savings account has seriously been one of the best decisions I’ve ever made. Living debt free has allowed me so much freedom in the last couple of years! I’ve started multiple businesses, traveled the world, taken vacations, bought a new-to-me car, and generally just enjoyed a life that is far less stressful than it used to be.
And I want the same thing for you!
How to Shovel Yourself Out of Debt and Into Your Dream Life
Now that I’ve (hopefully) convinced you to ditch your debt and move towards your best life, let’s talk about how.
There are a lot of opinions and methods to getting out of debt. Personally, I followed Dave Ramsey’s snowball method to get the ball rolling. I really liked his plan for a number of reasons. First, his seven baby steps are very clearly defined and easy to follow. I always felt like I was making progress, which was really motivating.
Secondly, Dave has basically built himself an empire around becoming debt free. The good news for you and me is that he has a TON of free information out there to help you get out of debt permanently. I listened to his radio show and watched many of his Youtube videos on a regular basis. I also bought his book The Total Money Makeover and liked it, although to be honest, he has so many free articles on his website I don’t think buying the book is a must.
The seven Baby Steps to becoming debt free essentially break down as follows:
- Save $1,000 – This gives you a buffer for the next big unexpected cost.
- Use the snowball method to pay off all of your debts, except for your home.
- Save 3-6 months of expenses in a separate account.
- Invest 15% of your income into retirement accounts.
- Fund your children’s college using an ESA account.
- Pay off your home mortgage.
- Build wealth and give to others.
A Final Thought on Committing to A Debt Free Lifestyle
When I was just getting started on my journey out of debt, one thing that initially plagued me was fretting about how long it was going to take me to do this. I was frustrated and impatient. I worried that it might take me years.
And then I realized something that changed my perception of the situation.
The time is going to pass anyway.
Whether it takes me six months or two years to bail myself out, it doesn’t matter. Because whether I do nothing or whether I act, the time is still going to pass.
In the end, we ended up paying off $16,000 in debt in just seven months on a very modest income. My goal at the time was to be completely debt free by our wedding day and, while I missed the mark, I paid off the last bill just 3 days after marrying my wonderful husband. What a great way to start our lives together!
I hope this post has give you some food for thought and challenges you to take the next step in living your ideal life. Reach for the stars, don’t settle for normal, and be brave. I believe in you!
“Nothing that’s worthwhile is ever easy. Remember that.”